9911796707
TMI Blog2009 (2) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... etted Railway officers of equal status being appointed as Arbitrators, one by the contractor from a panel made available by the General Manager of Northern Railways and the other by the Northern Railways, and the two arbitrators so appointed, in turn appointing an Umpire. 3. It is true that the Arbitral Tribunal should be constituted in the manner laid down in the Arbitration agreement. Provisions for arbitration in contracts entered by governments, statutory authorities, and government companies, invariably require that the Arbitrators should be their own serving officers. Such a provision has to be given effect, subject to requirements of independence and impartiality. But there can be exceptions and this case which has a chequered histo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uance of an order dated 24.8.2005 passed by the High Court, again a panel was made available and the respondent made its choice on 9.9.2005. As no steps were taken in pursuance of it by the appellant, the respondent sent a reminder on 14.10.2005. There was no response. In this background, the respondent again approached the High Court on 10.11.2005 in Arb. Petn. No. 256/2005 for appointment of an independent sole arbitrator. During the pendency of the said petition, the General Manager of Northern Railways appointed Sri Ved Pal as the contractor's nominee arbitrator on 22.11.2005. 5. The High Court was of the view that no useful purpose will be served by again reconstituting a Three Member Arbitral Tribunal in accordance with clause 64 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came into force, is different, as explained by this Court in Northern Railway Administration, Ministry of Railway, New Delhi v. Patel Engineering Company Ltd. [2008 (11) SCALE 500]. This Court held that the appointment of arbitrator/s named in the arbitration agreement is not mandatory or a must, but the emphasis should be on the terms of the arbitration agreement being adhered and/or given effect, as closely as possible. It was further held that the Chief Justice or his designate should first ensure that the remedies provided under the arbitration agreement are exhausted, but at the same time also ensure that the twin requirements of sub-section (8) of section 11 of the Act are kept in view. This would mean that invariably the court should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred on account of exigencies of service and transfer policy of the employer and that merely because an employee is appointed as arbitrator, his transfer cannot be avoided or postponed. But an effort should be made to ensure that officers who are likely to remain in a particular place are alone appointed as Arbitrators and that the Arbitral Tribunal consisting of serving officers, decides the matter expeditiously. Constituting Arbitral Tribunals with serving officers from different far away places should be avoided. There can be no hard and fast rule, but there should be a conscious effort to ensure that Arbitral Tribunal is constituted promptly and arbitration does not drag on for years and decades. 9. As noticed above, the matter has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any ceiling, have many a time resulted in the cost of arbitration approaching or even exceeding the amount involved in the dispute or the amount of the award. When an arbitrator is appointed by a court without indicating fees, either both parties or at least one party is at a disadvantage. Firstly, the parties feel constrained to agree to whatever fees is suggested by the Arbitrator, even if it is high or beyond their capacity. Secondly, if a high fee is claimed by the Arbitrator and one party agrees to pay such fee, the other party, who is unable to afford such fee or reluctant to pay such high fee, is put to an embarrassing position. He will not be in a position to express his reservation or objection to the high fee, owing to an apprehe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. 11. We find that a provision for serving officers of one party being appointed as arbitrator/s brings out considerable resistance from the other party, when disputes arise. Having regard to the emphasis on independence and impartiality in the new Act, government, statutory authorities and government companies should think of phasing out arbitration clauses providing for serving officers and encourage professionalism in arbitration. 12. As far as this case is concerned, we do not propose to issue any directions in regard to the fees, as the High Court has fixed the fee at Rs.10,000/- per hearing subject to a maximum of Rs.150,000/- plus clerkage, to be shared equally by the parties. 13. In view of the above, the appeal is dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
